Lowe's Analysis

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Feb 20, 2024

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SWOT BCG IE ANALYSIS 1 SWOT, BCG, and IE Matrix Analysis By: Danielle Robinson Grand Canyon University Professor: Dr. Gast January 17,2024 1

SWOT BCG IE ANALYSIS 2 Introduction SWOT, BCG, and IE Matrix’s provide essential information that improves strategic planning. The significance of the SWOT, BCG, and IE Matrix’s analysis displays details of a firm's resources and what it is capable of at the current market share, showing the importance of its contributions to the company's strategic plan. Strategic planning is important for any company as it helps the company to position itself in the various industries to which it belongs (David et al., 2020). These different matrixes are used to help an organization replicate the strengths, weaknesses, opportunities, and threats that the company may endure. Using current market shares and industry growth rates to evaluate the potential a company has and suggests further investment strategies. In this essay we will be analyzing Lowe’s SWOT, BCG, and IE matrix using their 2022 year ending reports. SWOT Matrix Analysis Since the COVID-19 pandemic Lowe's has been investing in its e-commerce making it easier for consumers to shop online and pick up in store, curbside, or delivered. Lowe's took advantage of Sears going out of business and acquired the Craftsman brand. They are also committed to improving their customer service experience in store and online. Strengths, Weaknesses, Opportunities, Threats The matrix is the most utilized matrix in strategic planning. A company's external opportunities and threats are matched with its internal strengths and weaknesses to create four different types of strategies using the SWOT matrix. Strategies for Strengths-Opportunities (SO) The approach known as strengths-opportunities (SO) leverages an organization's internal capabilities to capitalize on external possibilities. (David et al., 2020). 2

SWOT BCG IE ANALYSIS 3 Due to Lowe's brand recognition for providing quality products and customer service it can use this strength to expand its product lines, enhance their e-commerce platform and enter new markets. Weaknesses-Opportunities (WO) Strategies The weakness-opportunities (WO) strategy is intended to "improve internal weaknesses by taking advantage of external opportunities" (David et al., 2020). Offering discounts and exclusive promotions draws in more customer loyalty. This also gives the company a more competitive advantage. Lowe’s no longer has an international presence, therefore, by expanding their brand they can enter new markets while increasing their customer base. The downside to this would be it would require huge investments into research and development, marketing, and planning. 3

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SWOT BCG IE ANALYSIS 4 BCG MATRIX Analysis The Boston Consulting Group (BCG) Matrix is a tool that is "designed specifically to enhance a multidivisional firm’s efforts to formulate strategies" (David et al., 2020). The BCG matrix assesses a company's potential and recommends further investment ideas based on industry growth rates and present market shares (Jurevicius, 2013). The return on cash increases with market share. Lowe's can use the BCG matrix to make strategic decisions about their product lines such as what to invest in and what to divest. Their home décor product line such as smart home technology, outdoor living equipment, and energy efficient appliances would be considered Lowe's star products as they are products that are expected to continue growing and will help them keep their competitive position. Cash cow products are ones such as building supplies (i.e., lumber and cement) and basic hardware. 4

SWOT BCG IE ANALYSIS 5 While these products do not grow rapidly, they produce considerable revenue, and the company should concentrate on keeping their market share position. Question mark products are products such as flooring, kitchen appliances, and garden supplies that have potential for growth, however, Lowe's needs to invest in them to take advantage of obtaining a larger market share. Dogs are products that have low market share in an established market. Lowe’s products that would fall into this category include specialty tools and hardware that has a limited demand. These are products that the company may consider discontinuing so that they could invest in more profitable opportunities. In February of 2023 Lowe’s sold their Canadian division, based on the BCG Matrix the outside the US revenue didn’t generating much revenge and in return was best to discontinue. IE MATRIX The IE Matrix helps Lowe's to identify the strategies which are best for its current position and to develop an advantage over its competitors. Lowe's has strengths such as strong brand recognition, customer loyalty, and a strong financial position. Whereas its weaknesses are the limited selection of products and services and limited international presence. Lowe's has opportunities to take advantage of the growing trend of home improvement and DIY projects, expand its international presence and capitalize on the increase demand for home automation and smart home technology. Based on the matrix Lowe’s has a strong presence in the United States and their primary product line for Home Décor has a strong revenue front. However, when it comes to breaking down their ratings product-wise, they face threats from competition and economic downturns. Finally, the trend in home improvement is towards more do-it-yourself projects and online shopping. By using the IE Matrix, Lowe's can identify and capitalize on these trends to increase its market share and profitability. Alternative Strategies Lowe's needs to 5

SWOT BCG IE ANALYSIS 6 continue to expand its customer base by targeting new segments such as millennials or urban residents. To do this they could create marketing campaigns that appeal to these groups, develop, or carry products that meet their needs, and/or open stores in areas where they are more likely to shop. Another alternative strategy is to focus on sustainability. Consumers today are more concerned about the environment and Lowe's can take advantage of this by sourcing products from environmentally friendly suppliers, reducing waste, and energy usage in its stores. Finally, Lowe's needs to continue to focus on customer service. Improving customer service can lead to increased customer service and customer loyalty, this can be accomplished by investing in training their employees to provide exceptional service, improve only support, and ensure efficient and effective in-store processes. 6

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SWOT BCG IE ANALYSIS 7 References Curran & Connors. (n.d.). Building Our Total Home Strategy. 2022 Annual Report- Lowe’s corporate. https://corporate.lowes.com/sites/lowes-corp/files/2023-04/lowes-2022ar-full-report-4-6-23- final.pdf Fiscal 2022 10K . Home Depot announces fourth quarter and fiscal 2022. (n.d.). https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/press-release/q4-2022-earning- release.pdf David, F. R., David, F. R., & David, M. E. (2020). Strategic management: A competitive advantage approach . Pearson. Jurevicius, O. (2013, May 01). How to Focus on the Stars with a Clever BCG Matrix. Retrieved November 04, 2020, from https://strategicmanagementinsight.com/tools/bcg-matrix-growth- share.htm. 7

Lowe's Analysis

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